New Approach To Assessments

by John Thomson - Story: 29206April 30, 2007 / 6:00 am http://www.castanet.net/edition/news-story-29206-13-.htm#29206

Victoria has taken a new approach to assessing strata hotel units, major ski hills and major ports that will, according to Rick Thorpe the Minister of Small Business and Revenue and the Minister responsible for Regulatory Reform, strengthen certainty, equity and fairness and promote resort growth and tourism. But what does it really mean because government, you know what I mean. Here is my take on what will happen. You own a unit in a strata hotel and the strata hotel runs at fifty per cent occupancy. What is going to happen is you’re receiving a free ten per cent and whether you are taxed on residential or commercial, it is going to be based on the actual use? Now you will get a free ten per cent. That means if your property is running at fifty per occupancy as opposed to fifty percent residential, fifty per cent commercial you are allowed to actually have an additional ten per cent in residential. Your strata hotel would be taxed at 60 per cent in residential, forty per cent in commercial. The most important thing in this entire legislation is the certainty, so now buyers can take a look and know to the dollar based on what the hotel believes it will do in revenues what they will be paying in taxes.

If you currently are being classed in class one you don’t need to worry, you will always be in class one, you are grandfathered. That’s the big news. You are grandfathered. For anyone currently in class six it is going to be a benefit because they will now have a reduction in their taxes because they will be in this new lower tax bracket. The government has stated there will be an ongoing discussion related to areas that are maybe not taxed as fairly area’s that may be a little bit vulnerable, maybe those areas that have high residential taxes and high commercial taxes. It normally works out that more urban centres have lower residential taxes and the smaller communities have higher taxes. Property values should normally equate. The benefit is the certainty because the uncertainty has slowed growth ever since the news came out last September of the change in the tax picture. This is good stuff . .